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THE FACTS 1922 Coal Severance Deed Coal severance deed granted: A.The right to mine all coal B.Without reservation or liability for damages to surface or improvements upon the surface C.The right and privilege to use necessary surface over coal to construct and maintain air shafts to ventilate mines

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THE FACTS 1922 Coal Severance Deed Reserved The Grantors stated they: reserve unto themselves and their heirs and assigns the right to drill and operate through said vein of coal for oil and gas and any and all other minerals.

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THE FACTS October 1984 Ohio Department of Natural Resources issued a Coal Mining Permit for the area

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THE FACTS 1989 Datkuliaks – successor grantors of surface estate-leased to Oxford Oil the right to drill and operate a gas well.

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THE FACTS Due to lack of production, Oxford sold well and all liability to the Datkuliaks in May of 1990 for $3,000 Complete waiver obtained

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THE FACTS 1995 - Consolidated Land Company purchased the coal rights 2003 - Leased right to American Energy Corporation

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THE FACTS American Energy Corporation applied for a Permit to plug ODNR said – American Energy Corporation does not own the well and cannot plug Datkuliaks refused to realistically negotiate for sale of well

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THE LAWSUITS One day later – instead of a compulsory Counter-Claim, Defendants filed a Complaint with a single count for Declaratory Judgment on the rights of the Parties

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TRIAL COURT DECISION Matter of Deed Construction Key rulings: Deed language is clear and unambiguous Allowed Court to construe as a matter of law

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TRIAL COURT DECISION Key rulings: Deed language constitutes a complete and clear waiver without reservation or liability for damage that may arise by reason of mining said coal or the operation of said mine or mines to the surface or to the improvements upon the surface over said coal… Damages were contemplated by the parties

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TRIAL COURT DECISION Key rulings: Waiver of damages: does not conflict with right to drill for gas Continued use of gas well: interferes with right to mine ALL coal and effectively sterilizes coal Right to mine ALL coal coupled with Waiver of damages grants enormous entitlement to mine coal.

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TRIAL COURT DECISION Key rulings: Construe as a matter of law Clear and unambiguous – deed is conclusively presumed to express intent of parties No extrinsic evidence may be admitted Language in deed is dispositive of all questions of intent

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TRIAL COURT DECISION Reservation v. Exception In this case the Datkuliaks only had a reservation which allowed them to drill and operate through said vein of coal Coal owned by Plaintiffs Reservation – they did not keep title to any coal Exception – You except out a portion of what is granted – i.e. you may except or keep ownership in the coal around the well

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TRIAL COURT DECISION Clear right to mine all coal Gas well sterilizes coal Reservation does not diminish ability to mine all coal Defendants ordered to: immediately plug and cap the gas well at issue to assure their well does not interfere with Plaintiffs mining and Defendants are further prohibited from interfering with Plaintiffs right to safely mine all of its said coal. The End! – not quite

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ON APPEAL Datkuliaks raise several issues: Trial Court erred by determining right to mine coal is paramount to right to operate gas well Trial Court erred by refusing expert testimony Order to plug and cap without compensation is an unconstitutional taking without due process

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CURRENT STATUS Well is capped and plugged at the Datkuliaks expense MSHA approval pending No decision on Appeal

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APPLICABLE CASE LAW 1. Parties to deed stand in same position as parties to original deed. US Coal Co. v. Wayne Coal Co., (1919), 12 Ohio App. 1,4 2. Language from other deeds is irrelevant. Wiseman v. Cambria Products Co., (1989), 61 Ohio App.3d 294, 301 3. Clear and unambiguous deed language is conclusively presumed to express the intent of the parties at time of execution of the deed. Sword v. Sword, (1993), 86 Ohio App.3d at 161, 166

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APPLICABLE CASE LAW 4. No extrinsic evidence allowed to demonstrate intent of parties to a deed. Consolidated Land Co. v. Capstone Holding Co., (Ohio App. 7 District 2002), 2002 Ohio 7378 at p. 27 5. The right to drill for gas through a coal seam does not compromise the mining operators right to mine for coal. Redman v. Ohio Dept. of Natural Resources, 1997 Ohio App. LEXIS 4209 at 9-10 6. Right to mine coal and waiver of damages provided in deed can be superior and dominant over surface rights of gas company. The Ohio Valley Coal Co. v. The East Ohio Gas Co., Court of Common Pleas, Belmont County, Ohio, (1992), Case No. 91-CIV-210